Tis the season of thanks. Modica Law Firm and I have MANY reasons to be thankful. Before I explain why, here are my two favorite quotes about appreciation (a close relative of thankful):

“We are so often caught up in our destination that we forget to appreciate the journey, especially the goodness of the people we meet on the way. Appreciation is a wonderful feeling, don’t overlook it.”

“Appreciation is like an insurance policy. It has to be renewed every now and then.”

We are blessed by MANY good people who are part of our daily journey. Thanksgiving is an excellent opportunity to renew our appreciation for them. Here are ten of them:

Thanks to Labor News readers. We don’t communicate often, however, I feel your love. I sincerely hope that you read these columns and that they are helpful.

Thanks to Labor News editor Matt Hynes and his staff. You are an important voice for labor in Rochester. I am glad to support you as an advertiser. I thank you for the opportunity to write this column and share our expertise.

Thanks to Union leaders who trust us to serve their members. For more than 23 years, union leaders have trusted Modica Law Firm to serve people they care about deeply—their union brothers and sisters. They hold us to a very high standard. They want us to treat their union brothers and sisters like they are our siblings. We have done that consistently since we opened our doors on November 1, 1995.

Thanks to Union Members who trust us to represent them. We are nothing without you. My family, and the families of all on our team, owe you a great debt of gratitude for allowing us to serve you. We have fed our families and educated our children because of your labor and because you trusted us to help you.

Thanks to our team at Modica Law Firm. We are blessed with a compassionate, empathetic, dedicated and a highly professional team who believes in the Golden Rule (we treat our clients like we would want to be treated). We are thrilled each time we lessen the burden of a union member troubled by an accident, injury, illness or employment problem.

Thanks to the family members of the Modica Law Firm team. Your loved ones work very hard. Thank you for supporting them in this important work.

Thanks to Union leaders who are considering recommending us to their members. Talk to your fellow union leaders about us. They will tell you that they refer union members to us because they know that they will be served professionally and honestly.

Thanks to our Judges. The men and women who decide Workers’ Compensation, Social Security Disability, personal injury and employment cases are honest, work hard and do their best to “get it right.” I wish that they agreed with us 100% of the time, however, I respect them greatly.

Thanks to lawyers on the other side of our cases. We know you have a job to do. Thank you for understanding that we too have a job to do. Thank you respecting us and our clients. Thanks too for referring folks to us that you cannot serve.

Thanks to my family and Brad Kammholz. I am blessed to have a wonderful wife and daughter who do more for me than I can express. My wife Lorrie runs the “day to day” operations of Modica Law Firm, freeing me up to practice law. My close friend and colleague (Brad Kammholz) partners with us in personal injury cases and has produced tremendous results for our clients. I am proud to work with him.

Take a moment to appreciate the many blessings in your life. I hope that you are as fortunate as me.

Is Your Intern an Employee Who Must be Paid (and afforded mandatory benefits)?

Fair Labor Standards Act [“FLSA”] is the federal law that applies to employers with gross annual revenues of $500K. The New York Labor Law [“NYLL”] applies to all employers.

These laws require that employees be paid not less than the current minimum wage for all hours worked. Currently, the minimum hourly wage in NY is $10.40. Effective December 31, 2018, the minimum hourly wage is $11.10.

Non-exempt employees who work more than forty (40) hours in a given week must be paid overtime, i.e., one and one-half times their regular rate of pay for all hours worked above forty (40).

Some employees are exempt from the right to receive overtime pay. To be exempt, the following three must be true:

EMPLOYEE MUST BE PAID A WEEKLY SALARY OF A SPECIFIED AMOUNT. IF PAID LESS, THEY ARE NON-EXEMPT (AND ENTITLED TO OVERTIME PAY) AS A MATTER OF LAW. Currently, the minimum weekly salary for an exempt employee in NY is $780.00 ($40,560/year). Effective December 31, 2018, the minimum weekly salary is $832.00.

THERE MUST BE NO UNLAWFUL DEDUCTIONS FROM THE SALARY PAID. In simple terms, absent five recognized circumstances, you cannot make any deductions from the salary paid. The five circumstances are: (1) absenteeism; (2) certain sick leave/Family & Medical Leave Act protected leave; (3) penalties imposed in good faith for infractions of safety rules; (4) unpaid disciplinary suspensions; and (5) certain mistaken overpayments.

FINALLY, THE DUTIES PERFORMED BY THE EMPLOYEE MUST MEET ONE OF SEVERALTESTS IN THE FLSA. The most common “white collar” exemptions are: (i) Administrative, (ii) Executive and (iii) Professional.

On January 5, 2018, the United States Department of Labor [“USDOL”]—the agency that enforces the FLSA—announced it would no longer apply the six-factor test in USDOL Fact Sheet #71 (https://www.dol.gov/whd/regs/compliance/whdfs71.pdf) to determine whether an intern was an employee for purposes of wage and hour laws. Instead, it will apply the “primary beneficiary” test used by several federal circuit courts (including the Second Circuit in Glatt v. Fox Searchlight Pictures, 791 F.3d 376 [2015]).

The primary beneficiary test considers the extent to which:

Both parties understand that the intern is not entitled to compensation.

The internship provides training that would be given in an educational environment.

The intern’s completion of the program entitles him or her to academic credit.

The internship corresponds with the academic calendar.

The internship’s duration is limited to the period when the internship educates the intern

The intern’s work complements rather than displaces the work of paid employees while providing significant educational benefits.

The intern and the employer understand that the internship is conducted without entitlement to a paid job at the internship’s end.

None of these seven factors are addressed with a simple yes or no answer. Rather, they are addressed by the extent to which each factor is met.

The factors are used to determine which party—the intern or the lawyer/other entity—is the primary beneficiary of the relationship. If at least 51 percent of the benefits go to the intern, the intern arguably is the main beneficiary and does not have to be paid.

Will New York Apply the Primary Beneficiary Test?: Historically, the NYS Department of Labor [“NYSDOL”]– the agency that enforces the NYLL—has required consideration of 11 factors, the six factors in USDOL Fact Sheet #71PLUS five more of its own.

Any clinical training is performed under the supervision and direction of people who are knowledgeable and experienced.

The trainees or students do not receive employee benefits.

The training is general and qualifies trainees or students to work in any similar business. It is not designed specifically for a job with the employer that offers the program.

The screening process for the internship program is not the same as for employment. The screening only uses criteria relevant for admission to an independent educational program.

Advertisements, postings, or solicitations for the program clearly discuss education or training, rather than employment, although employers may indicate that qualified graduates may be considered for employment.

Practical Advice: What can you do to limit your liability if you engage an intern and do not want the legal obligation to pay them?

Have a written policy and address as many of the factors above in writing with the intern BEFORE he or she begins the experience. Have the intern sign a document indicating that he or she understands and accepts your policy and description of the factors.

Train those who will interact with the interns to be sure that they respect each of the factors above and acts consistently with your direction.

Keep accurate records of the work done by interns.

Schedule internships to accommodate interns’ academic schedules, preferably permitting them to work after class hours, on weekends, or during vacations.

Limit the duration of internships to the time needed to impart specifically identifiable educational or training benefits to interns.

Liaise formally or informally with interns’ schools or instructors and document how the internship complements the interns’ academic program, preferably resulting in the intern receiving academic credit for the internship.

Assign individual mentors/supervisors to each intern to ensure that the intern receives some structured instruction and is not relegated only to performing menial tasks.

Regardless of Any Obligation to Pay, You may NOT Unlawfully Discriminate

Since 2014, interns in NY have been protected from unlawful discrimination like most employees. For example, an intern may not be subjected to harassment or other adverse action on account of their membership in a protected class (see Section 296-c of the NY Executive Law and https://dhr.ny.gov/sites/default/files/pdf/intern-rights.pdf).

Interns who complain in good faith of unlawful discrimination are protected from retaliation.

Interns who believe that their rights have been violated may file a charge of discrimination with the New York State Division of Human Rights [“DHR”], the agency that enforces Section 296-c. The deadline to file such a charge is 365 days from the date of the action they wish to challenge. Interns do NOT have to hire a lawyer to prosecute a charge of discrimination with the DHR.

Alternatively, an intern may file a lawsuit in New York State Supreme Court within three years from the date of the action they wish to challenge.

Earlier this year, we notified you about changes made to New York laws that prohibit sexual harassment in the workplace. The most significant changes were that ALL employers must (1) adopt and distribute to employees a sexual harassment prevention policy; and (2) train all employees about how to prevent sexual harassment.

In early September of 2018, we notified you that the New York State Department of Labor, in consultation with the New York State Division of Human Rights, developed and released a DRAFT model sexual harassment prevention policy (which included a model employee complaint form) and a model sexual harassment prevention training program. The State asked employers and other interested parties for comment.

After considering these comments, the State issued its final guidance on October 1, 2018. The updated final guidance and other resources–including a model policy, model training materials, and a Toolkit For Employers–are available on a website known as Combating Sexual Harassment in the Workplace.

Here’s what you need to know right now:

Employers must issue to employees, by the close of business on October 9, 2018,a compliant sexual harassment prevention policy.

The deadline to provide the mandated training for existing employees has been extended to October 9, 2019 (the original deadline was January 1, 2019).

The final guidance eliminated the requirement that all newly hired employees receive sexual harassment prevention training within thirty days of hire, however, it recommends that new hires be trained “as quickly as possible.”

A complaint form need not be included within the sexual harassment prevention policy itself, however, employers should be clear about where an employee may secure such a form. Employers can adopt the model employee complaint form.

The final guidance also includes FAQs addressing the policy and training requirements, as well as on nondisclosure agreements and mandatory arbitration provisions.

In 1939, Congress first authorized the Social Security Administration (SSA) to make benefit payments to another person or organization (aka a representative payee) when a beneficiary is not capable of managing his or her own Social Security benefits.

Representative payees are required for adults judged legally incompetent by a State court and for most minor children. Most legally competent adult beneficiaries do not require payees, however, a competent adult unable to manage or direct the management of his or her own benefits may require a payee. As of the end of 2016, 8.8% of all beneficiaries required a representative payee. While that may seem small, it equates to ~5.3 million people.

Typically, SSA will first consider the beneficiary’s family and friends for the payee position. Where such support networks do not exist, SSA may rely upon state, local or other community resources instead. Payees are NOT allowed to collect a fee for services performed. However, very limited exceptions exist for certain organizations who must file a separate application (SSA-445) to obtain authorization to collect a fee.

A payee has significant responsibilities to the beneficiary and to SSA. The payee’s responsibility to the beneficiary is to decide how benefits should be spent to secure him or her a stable living environment. This should ensure that the beneficiary’s food, shelter, clothing and medical care needs are met. If any funds are leftover, they should be saved for the beneficiary’s future use. At least once per year, the payee must report how benefits were used or saved. Thus, it is important the payee keep a record of deposits and expenses for each beneficiary served.

Additionally, the payee must report to SSA any changes that would impact the beneficiary’s entitlement to benefits or payment amount. This includes whether the beneficiary moves, dies, divorces, changes his or her name, starts or stops working, changes his medical status, is incarcerated, is overpaid, or no longer needs a representative payee.

This list of responsibilities is not comprehensive. Many other issues can arise while acting as a payee. Moreover, the nature of the benefits payable can alter how a representative payee may act. For example, the nature of Social Security Disability (“SSD”) and Supplemental Security Income (“SSI”) is very different. Thus, it is important that a representative payee understand the nature of the benefits payable to his or her beneficiary.

The Strengthening Protections for Social Security Beneficiaries Act of 2018:

Changes to the representative payee program last took place 14 years ago. In the interim, significant concerns have been raised about the SSA’s management of the program.

Congress recently passed the Strengthening Protections for Social Security Beneficiaries Act of 2018. This bill was signed into law on April 13, 2018, the effective date. The Act will:

Increase oversight of representative payees by increasing the number of performance reviews of payees.

Eliminate the requirement to file the annual accounting form for representative payees who are parents living with their child or who are spouses

Require SSA to identify whether a beneficiary is in foster care and reassess whether the payee is appropriate, and direct SSA to study how better to coordinate with Adult protective Services and with state guardianship courts.

Allow beneficiaries to make a designation of their preferred payee in advance and require SSA to assess the appropriateness of the order of preference list it uses to select payees.

Codify the policy that bans individuals with certain criminal convictions from serving as payees and prohibiting individuals who have payees from serving as a payee for others.

Limit overpayment liability for children in the child welfare system.

SSA may be contemplating other changes to the representative payee system. Among other things mentioned by the Social Security Advisory Board, it recommended the Office of Management and Budget study how best to coordinate the management of federal benefits for people who have been determined to be financially incapable, with the recognition of alternative approaches such as Supported Decision Making.

Taking on responsibility as a representative payee can seem daunting. To address this, SSA provides several resources and publications for guidance. This includes online publications outlining the representative payee obligations (whether an individual or organization) as well as the opportunity to maintain accounting through SSA’s website. Such resources can be found here: (https://www.ssa.gov/payee/NewGuide/toc.htm). When in doubt, you can call Social Security at 1-800-772-1213 or visit your local SSA District Office.